028 combined new hlth05
TRANSCRIPT
-
8/14/2019 028 Combined New Hlth05
1/29
Society of ActuariesNew Orleans Health/Pension Meeting
June 15 - 17
Session 28 PD
Long Term Disability Experience Committee Update
2
LTD Experience Committee
Agenda
Recap of Experience Table Development
Challenges Facing the Experience Committee
Valuation Table versus Experience Table
Measuring & Monitoring Claim Management Results
The Challenge of Interpreting Results
SOA 2005 June Spring Meeting - 28PD, Long-Term Disability Experience Committee Update
-
8/14/2019 028 Combined New Hlth05
2/29
3
LTD Experience Committee
Presenters
Roger Martin, UnumProvident
Rick Leavitt, Smith Group
Tom Casalena, Reliance Standard
4
LTD Experience Committee
Participating Companies
AIG/American General Lafayette Life
American United Life Insurance Co. Liberty Mutual
Anthem Life Insurance Company MetLife Ins. Co.
Assurant Mutual of Omaha Insurance Co.
CIGNA Group Insurance Principal Financial Group
CNA Insurance Co Prudential Financial
Florida Combined Life Reliance Standard Life Ins. Co.
Genworth Safeco Insurance Co.
Guardian Life Insurance Co. Standard Insurance Co.Hartford Life Insurance Co States West
Jefferson Pilot Financial UnumProvident Corp.
SOA 2005 June Spring Meeting - 28PD, Long-Term Disability Experience Committee Update
-
8/14/2019 028 Combined New Hlth05
3/29
5
LTD Experience Committee
Experience Committee Members
Edd Bailey - Assurant Rick Leavitt - Smith Group
Dennis Brewer - Hartford Allen Livingood - UnumProvident
Warren Cohen - Relaince Standard Jack Luff - SOA
Tom Corcoran - Tillinghast Roger Martin - UnumProvident, Chairman
Pat Fay - MassMutual Chuck Meintel - JHA
Deb Fredricks - MetLife Eric Poirier - UnumProvident
Steve Garfield - Standard Ray Siwek - Prudential
Paul Hitchcox - ULR Nick A. Smith - CIGNA
Beth Horvath - Hartford Katie Ward - CIGNA
6
LTD Experience Committee
Profile of Initial Review
19 companies participating.
More than 1.7 million claims submitted with more than 1.0 million currently in
experience study.
Not all data submitted by each company was in sufficient detail to be included in
this initial review most notable exclusion was by calendar year.
25 million months of claim exposure over 10+ calendar years.
Dampening factors will be applied to reduce the influence of those companies
supplying the largest exposures.
Initial variables reviewed include age, gender, elimination period, duration,diagnosis of claim, definition of disability, and gross benefit amount.
Analysis of raw recovery and death rates along with actual to expected ratios
relative to Table95A (t95a).
SOA 2005 June Spring Meeting - 28PD, Long-Term Disability Experience Committee Update
-
8/14/2019 028 Combined New Hlth05
4/29
7
LTD Experience Committee
Recovery Rate - Company Distribution
0.01%
0.10%
1.00%
10.00%
100.00%
1-67-
12
13-18
19-24
25-30
31-36
37-42
43-48
49-54
55-60
61-66
67-72
73-78
79-84 96 10
8120
132
144
156
168
180
192
20421
622
8
240+
Claim Duration
TerminationRate
Min 25%-ile Median 75%-ile Max
8
LTD Experience Committee
Recovery Rate - EP 180
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6 18 30 42 54 66 78
Monthly Claim Duration
TerminationRate
Actual Recovery
Expected Recovery - t95a
SOA 2005 June Spring Meeting - 28PD, Long-Term Disability Experience Committee Update
-
8/14/2019 028 Combined New Hlth05
5/29
9
LTD Experience Committee
Death Rate
0.0%
0.2%
0.4%
0.6%
0.8%
1.0%
1.2%
1.4%
4 16 28 40 52 64 76
Monthly Claim Duration
TerminationRate
Actual Death
Expected Death - t95a
10
LTD Experience Committee
Industry Termination Summary
96%
114%
141%
79% 77% 82% 79%85% 88% 87% 83%
96%
102%
114%
73%
141%
110%
108%
160%
103%
131%
79%
102%
84%
97%
50%
100%
150%
200%
1-3 mo 4-6 mo 7-9 mo 10-12
mo
Yr 2 Yr 3 Yr 4 Yr 5-7 Yr 8-10 Yr 11-
14
Yr 15+ All
Claim Duration
%t
95a
A/E Recovery A/E Death 'Combined' A/E
SOA 2005 June Spring Meeting - 28PD, Long-Term Disability Experience Committee Update
-
8/14/2019 028 Combined New Hlth05
6/29
11
LTD Experience Committee
Recovery Rates by Calendar Year & Duration
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
90-92 93-95 1996 1997 1998 1999 2000 2001 2002
Calendar Year
TerminationRate-Yrs>1
0%
1%
2%
3%
4%
5%
6%
7%
8%
TerminationRateYr1
Yr 2 Yr 3 Yr 4 All Yr 1
12
LTD Experience Committee
Death Rates by Calendar Year & Duration
0.25%
0.50%
0.75%
1.00%
90-92 93-95 1996 1997 1998 1999 2000 2001 2002
Calendar Year
TerminationRate
Yr 1 Yr 2 Yr 3 Yr 4 All
SOA 2005 June Spring Meeting - 28PD, Long-Term Disability Experience Committee Update
-
8/14/2019 028 Combined New Hlth05
7/29
13
Challenges Facing the Experience Committee
Initial Output:
Raw Experience Rates, tabulated by various segments
Desired Output:
Experience Report what is important?
Experience Table
Valuation Table
14
Challenges Facing the Experience CommitteeVolatility of Results
Raw Termination Rates: Male/Age 40-44/EP 90/ All Diagnosis
0%
1%
2%
3%
4%
5%
6%
12 22 32 42 52 62 72 82
Recov
Death
SOA 2005 June Spring Meeting - 28PD, Long-Term Disability Experience Committee Update
-
8/14/2019 028 Combined New Hlth05
8/29
15
Challenges Facing the Experience CommitteeVolatility of Results
Raw Termination Rates: Male/Age 50-54/All EP's/Cancer
0%
1%
2%
3%
4%
5%
6%
12 22 32 42 52 62 72 82
Recov
Death
16
Challenges Facing the Experience CommitteeVolatility of Results
How Much Smoothing ?
We view graduation not merely as smoothing, but as the
more general process of estimating true rates which actually
prevail in the population
Kimeldorf and Jones Bayesian Graduation, TSA XIX 1967
12 Ages * 2 Genders * 7 Diagnoses * 3 Elims * 96 Durations *
2 Def of Dis = 96,768 buckets
Study includes: 382K recoveries and 127K Deaths
SOA 2005 June Spring Meeting - 28PD, Long-Term Disability Experience Committee Update
-
8/14/2019 028 Combined New Hlth05
9/29
17
Challenges Facing the Experience Committee
Additional Considerations
How to handle Settlements?
How to handle change in definition?
Mental/Nervous Limits?
+
Additional Data validation?
18
Challenges Facing the Experience CommitteeDefinition of Disability
EP 90 Day Recovery Rates: Own Occ Test by Duration
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
12 22 32 42 52 62 72 82
24 Mo
UnLimited
SOA 2005 June Spring Meeting - 28PD, Long-Term Disability Experience Committee Update
-
8/14/2019 028 Combined New Hlth05
10/29
19
Challenges Facing the Experience CommitteeClaim Settlements
All Claims - Monthly Termination Rates
0.00%
0.05%
0.10%
0.15%
0.20%
0.25%
0.30%
0.35%
0.40%
48 54 60 66 72 78 84
Recov
Death
Settlements
20
Challenges Facing the Experience CommitteeData Quality
Raw Death Rates: All Claims
0.2%
0.3%
0.4%
0.5%
0.6%
0.7%
0.8%
0.9%
1.0%
1.1%
20 22 24 26 28 30 32 34 36
EP-90
EP-180
SOA 2005 June Spring Meeting - 28PD, Long-Term Disability Experience Committee Update
-
8/14/2019 028 Combined New Hlth05
11/29
21
Valuation Table versus Experience Table
Reserve Margin:
87CGDT: Uses 90% of experience table term rates
Table95a: No Margin
Table 2005: ??
What is the right level of margin for a valuation table?
22
Valuation Table versus Experience Table
Valuation Table:
Accurate Reserves on an existing block of claims
(STAT? GAAP? TAX?)
Pricing Table:
Will accurately reproduce total claim cost given claim
incidence
Experience Table
Matches observed termination rates given study
methodology
SOA 2005 June Spring Meeting - 28PD, Long-Term Disability Experience Committee Update
-
8/14/2019 028 Combined New Hlth05
12/29
23
Valuation Table versus Experience Table
Question:
When tabulating termination rates should you expose claims
from the beginning of the benefit period or from the date the
claims is submitted?
Answer:
Uh, it depends
Do you hold a reserve on claims in the elimination period?
Do you hold a reserve for claims that are not approved?
Do you include in your termination study claimants that returnto work before submitting a claim?
24
Valuation Table versus Experience Table
One Approach:
No reserve on claims in the elimination period (captured in IBNR)
Pending claims get a denial rate times a full reserve
Termination study includes only claims with payments
Valuation Pricing
Expose Paid Claims from
Submit Date
Expose all claims from
benefit begin date
Do not include claims
closed when submitted
Claim incidence includes
all paid claims
SOA 2005 June Spring Meeting - 28PD, Long-Term Disability Experience Committee Update
-
8/14/2019 028 Combined New Hlth05
13/29
25
Valuation Table versus Experience Table
Dur
Term
Rates
Reporting
Pattern
1 3%
2 10%
3 20%
4 11% 30%
5 10% 20%
6 9% 8%
7 7% 3%
8 6% 3%
9 5% 2%10 4% 1%
11 4% 1%
12 3% 0%
Simple Model Observations
Almost 7% of claims
close before they
report
Claims on reserve have
a reduced expectation
of termination since
they have already
survived to that point
26
Valuation Table versus Experience Table
Claim Termination Rates
0%
2%
4%
6%
8%
10%
12%
4 5 6 7 8 9 10 11 12Claim Duration (Mo)
Reserve Claims
All Claims
SOA 2005 June Spring Meeting - 28PD, Long-Term Disability Experience Committee Update
-
8/14/2019 028 Combined New Hlth05
14/29
27
Valuation Table versus Experience Table
Impact on Reserve Factor
30
35
40
45
50
55
60
4 5 6 7 8 9 10 11 12Claim Duration (Mo)
ReserveFactor
Experience Table
Valuation Table
28
Valuation Table versus Experience Table
Valuation
Exposure designed to
match claims on reserve
Selection of exposure
depends on reserve
methodology
** Match your Method **
Pricing or Experience:
All paid claims count
towards incidence
Expose all claims from the
beginning of the benefit
period
We do not care when a
claim is submitted, only
how many months are paid.
SOA 2005 June Spring Meeting - 28PD, Long-Term Disability Experience Committee Update
-
8/14/2019 028 Combined New Hlth05
15/29
29
Valuation Table versus Experience Table
but Reality is always more complex
Claim termination rate depends on when the claim was
submitted.
Valuation method will work in aggregate, but will not work
for specific claims.
Simple method will over reserve for late reports and under
reserve for early reports
For pricing reserves pay attention to total benefit paid. Make
sure the termination rates produce accurate total claim cost.
30
Valuation Table versus Experience Table
Other Issues:
Your company has a practice of closing out claims early with a lump
sum payment spanning several months. (Advance Pay and Close).
Question: should claims be exposed to the claim closure date? Or to
the end of the benefit period?
Valuation Experience
What is your practice? Do you
release reserve when the claim is
closed?
We do not care when the claim was
closed, only how much the claim
was paid.
Experience table will under reserve
remaining claims
Count as full termination at the end
of the paid benefit (Experience
Committee Method
SOA 2005 June Spring Meeting - 28PD, Long-Term Disability Experience Committee Update
-
8/14/2019 028 Combined New Hlth05
16/29
31
Valuation Table versus Experience Table
Handling of Advanced Pay and Close:
Two Options for Valuation
1. Hold a full reserve until the end of the paid benefit period
and use the pricing table approach of counting exposure
(Advanced Closures are used as a benefit management tool,
but have little impact on current reported income)
2. Release the reserve when the claim is closed and count each
closure as a fractional closure in that duration
Caution: Material change in practice may render current
termination rates inappropriate
32
Measuring & Monitoring Claim Management ResultsExamples of Metrics and Related Uses
Overview
A/E Termination Rates
Net Closure Rates
Percentage of Claimants Receiving SS Awards
SOA 2005 June Spring Meeting - 28PD, Long-Term Disability Experience Committee Update
-
8/14/2019 028 Combined New Hlth05
17/29
33
Measuring & Monitoring Claim Management ResultsExamples of Metrics and Related Uses
A/E Termination Rates: Uses
Assess Reserve Adequacy
Develop Pricing Assumptions
Measure Loss Experience
34
Measuring & Monitoring Claim Management ResultsExamples of Metrics and Related Uses
Net Closure Rates: Uses
Explain Variances in Financial Results
Assess Claim Management Performance
SOA 2005 June Spring Meeting - 28PD, Long-Term Disability Experience Committee Update
-
8/14/2019 028 Combined New Hlth05
18/29
35
Measuring & Monitoring Claim Management ResultsExamples of Metrics and Related Uses
Percentage of Claimants Receiving SS Awards:
Uses
Assess Claim Management Performance
Assess Financial Costs
Assess the Productivity / Value of SS Advocacy
36
Measuring & Monitoring Claim Management ResultsExamples of Metrics and Related Uses
A/E Termination Rates:
Sample Report Template
Measurement Considerations
Parameters Under Study
SOA 2005 June Spring Meeting - 28PD, Long-Term Disability Experience Committee Update
-
8/14/2019 028 Combined New Hlth05
19/29
37
Measuring & Monitoring Claim Management ResultsExamples of Metrics and Related Uses
Sample Template #1
Actual to Expected Termination Results
Summary by Selecte d Variables: Claim Count Basisfor Claims Terminated Through 12/31/2004 , Developed Through 03/31/2005
Selected Paramater
Rolling N-year Observation Period
S el ect ed Pa ra mt er Ex pos ure ( yrs ) by Du ra ti on Mon th A/E Ra ti os by Du ra ti on Mo nth
Classifications
-
8/14/2019 028 Combined New Hlth05
20/29
39
Measuring & Monitoring Claim Management ResultsExamples of Measurement Techniques
A/E Termination Rates: Parameters Under
Study
Primary
Aggregate, EP, Gender and Diagnosis
Secondary
Gross Benefit, Net Benefit, Benefit %
Own-OCC period, Age Group, Industry
Case Size, Occupation and Other
40
Measuring & Monitoring Claim Management ResultsExamples of Measurement Techniques
Net Closure Rates:
Sample Report Template
Measurement Considerations
Parameters Under Study
SOA 2005 June Spring Meeting - 28PD, Long-Term Disability Experience Committee Update
-
8/14/2019 028 Combined New Hlth05
21/29
41
Measuring & Monitoring Claim Management ResultsExamples of Measurement Techniques
Sample Template #1
LTD Net Closure Rate s *
By Calendar Quarter and Duration
Aggregate Results
Basis : Count Basis
S el ect C ou nt O f O pe n C la im s a s o f B OP B y C al en da r Q u art er C lo se d C la im % by C al en da r Q u art er
Duration Ranges 1q05 2q05 3q05 4q05 Total 1q05 2q05 3q05 4q05 Total
Basis : Reserve - Weighted
S el ect To tal O pe n Re se rve s a s o f B OP B y C al en da r Q u arte r Re se rve C ha ng e % by C al en da r Q ua rte r
Duration Ranges 1q05 2q05 3q05 4q05 Total 1q05 2q05 3q05 4q05 Total
* Net of Re-open claims
42
Measuring & Monitoring Claim Management ResultsExamples of Measurement Techniques
Sample Template # 2
LTD Net Closure Rates *
Summary by Se lected Variablefor Claims Terminated During Q105
Selected Paramater
Basis : Count Basis
Selected Paramter Count Of Open Claims as of BOP By Duration Closed Claim % by Duration Normalized
Cl assi fi cations [0,6) [6,12) .. Total
-
8/14/2019 028 Combined New Hlth05
22/29
43
Measuring & Monitoring Claim Management ResultsExamples of Measurement Techniques
Net Closure Rates: Parameters Under Study
Primary
Aggregate, Duration and Calendar Period
Secondary
Gross Benefit, Net Benefit,
Diagnosis, Claim Office, Other
44
Measuring & Monitoring Claim Management ResultsExamples of Measurement Techniques
Percentage of Claimants Receiving SS Awards:
Sample Report Template
Measurement Considerations
Parameters Under Study
SOA 2005 June Spring Meeting - 28PD, Long-Term Disability Experience Committee Update
-
8/14/2019 028 Combined New Hlth05
23/29
45
Measuring & Monitoring Claim Management ResultsExamples of Measurement Techniques
Sample Template #1
LTD Social Security Offsets *By Calendar Quarter
Developed Through 03/31/2005
Percentage of Claimants Receiving Awards
Quarter Gender Duration
Ending Male Female < 24 Months = 24 Month Total
2Q2000
3Q2000
|
|
1Q2005
* Includes Actual and Estimated Awards
46
Measuring & Monitoring Claim Management ResultsExamples of Measurement Techniques
Sample Template # 2
LTD Social Security Offsets *
By Company, Duration, and Gender
As of 03/3 1/2005
Select Parameter:
Males Females Total Male and Female
Duration # Claims # Awards SS Offset % # Claims # Awards S S Offset % # Claims # Awards S S Offset %
-
8/14/2019 028 Combined New Hlth05
24/29
47
Measuring & Monitoring Claim Management ResultsExamples of Measurement Techniques
% of Claimants Receiving SS Awards:
Parameters Under Study
Primary
Aggregate, Gender, Duration and Calendar
Period
Secondary
Claim Office, Other
48
The Challenge of Interpreting ResultsExamples Of Potential Challenges
Internal/External Reasons
Significant Variance By Company
Converting Termination A/E into Implications for
Reserve Adequacy
Adequacy Weighted A to E
SOA 2005 June Spring Meeting - 28PD, Long-Term Disability Experience Committee Update
-
8/14/2019 028 Combined New Hlth05
25/29
49
The Challenge of Interpreting ResultsInternal / External Reasons
Data Integrity Issues
Changes in Claims Administrative Systems
Changes in Claims Administrative Practices
Changes in Business Mix
Economic Forces
50
The Challenge of Interpreting ResultsInternal/ External Reasons
Some Action Steps For Consideration:
Incorporate Routine Data Audit Checks
Meet Regularly with the Disability Claim Managers
Normalize Results for Comparison Purposes
Assign Credibility Statistics to the Metrics
Review Specific Case Outliers
Compare to Industry Benchmarks
SOA 2005 June Spring Meeting - 28PD, Long-Term Disability Experience Committee Update
-
8/14/2019 028 Combined New Hlth05
26/29
51
The Challenge of Interpreting ResultsVariance by Carrier
Study Shows Significant Variance by Carrier
High Terms early followed by low terms in later durations
. Or Vice Versa
Causes?
Claims Management Business Mix
Approval Rate Blue versus White
Timing of Process w/ STD?
How Aggressive?
Quality of Data?
Caution:Aggregate Results may not match your companys experience
52
The Challenge of Interpreting ResultsTermination A to E Report
Total Terminations: Report 1 Total Terminations: Report 2
Duration Actual Expected A to E Duration Actual Expected A to E
Year 1 6,152 5,127 120.0% Year 1 4,101 5,127 80.0%
Year 2 1,801 1,637 110.0% Year 2 1,473 1,637 90.0%
Year 3 1,017 1,130 90.0% Year 3 1,243 1,130 110.0%
Year 4 379 421 90.0% Year 4 506 421 120.0%
Year 5 206 187 110.0% Year 5 206 187 110.0%
Year 6 147 147 100.0% Year 6 147 147 100.0%
Year 7 103 114 90.0% Year 7 103 114 90.0%
Year 8 76 95 80.0% Year 8 90 95 95.0%
Year 9 58 83 70.0% Year 9 83 83 100.0%
Year 10 47 67 70.0% Year 10 67 67 100.0%
Year 11+ 219 364 60.0% Year 11+ 383 364 105.0%Total 10,205 9,373 108.9% Total 8,124 9,373 86.7%
Question: What are adequacy implications of the two reports?
For the entire block? For New Claims?
SOA 2005 June Spring Meeting - 28PD, Long-Term Disability Experience Committee Update
-
8/14/2019 028 Combined New Hlth05
27/29
53
The Challenge of Interpreting ResultsTermination A to E Report
Illustrative Purposes Only: Actual Impacts depend on
demographics of your block and the expected termination rates
Impact of 10% drop in Termination Rate
Duration of the Adjustment ===================>
Dur of
Claim Yr 11+ Yr 10 Yr 9 Yr 8 Yr 7 Yr 6 Yr 5 Yr 4 Yr 3 Yr 2 Yr 1
Year 1 0.30% 0.08% 0.09% 0.11% 0.14% 0.20% 0.35% 0.51% 1.00% 1.87% 1.30%
Year 2 0.35% 0.09% 0.11% 0.14% 0.17% 0.23% 0.41% 0.61% 1.19% 0.87%
Year 3 0.46% 0.11% 0.14% 0.17% 0.21% 0.30% 0.52% 0.75% 0.64%
Year 4 0.56% 0.14% 0.17% 0.21% 0.26% 0.35% 0.63% 0.39%
Year 5 0.64% 0.17% 0.20% 0.25% 0.31% 0.43% 0.34%
Year 6 0.75% 0.20% 0.24% 0.30% 0.37% 0.23%
Year 7 0.98% 0.24% 0.30% 0.36% 0.20%
Year 8 1.16% 0.29% 0.35% 0.21%
Year 9 1.49% 0.35% 0.21%
Year 10 1.74% 0.22%
Year 11+ 2.15%
54
The Challenge of Interpreting ResultsTermination A to E Report
Adequacy Implications of Report 1Termination Report
Dura tion A to E Variance
Adequacy
Impact per 10%
Variance
Adequacy
Impact
Adequacy
Impact per 10%
Variance
Adequacy
Impact
Year 1 120% 20% 0.13% 0.26% 1.30% 2.59%
Year 2 110% 10% 0.36% 0.36% 1.87% 1.87%
Year 3 90% -10% 0.42% -0.42% 1.00% -1.00%
Year 4 90% -10% 0.31% -0.31% 0.51% -0.51%
Year 5 110% 10% 0.27% 0.27% 0.35% 0.35%
Year 6 100% 0% 0.19% 0.00% 0.20% 0.00%
Year 7 90% -10% 0.16% -0.16% 0.14% -0.14%
Year 8 80% -20% 0.16% -0.32% 0.11% -0.23%
Year 9 70% -30% 0.15% -0.45% 0.09% -0.28%
Year 10 70% -30% 0.14% -0.43% 0.08% -0.23%Year 11+ 60% -40% 0.82% -3.26% 0.30% -1.22%
Total 109% 9% -4.46% 1.20%
Entire Block Claims in Year 1
SOA 2005 June Spring Meeting - 28PD, Long-Term Disability Experience Committee Update
-
8/14/2019 028 Combined New Hlth05
28/29
55
The Challenge of Interpreting ResultsTermination A to E Report
Adequacy Implications of Report 2Termination Report
Duration A to E Variance
Adequacy
Impact per 10%
Variance
Adequacy
Impact
Adequacy
Impact per 10%
Variance
Adequacy
Impact
Year 1 80% -20% 0.13% -0.26% 1.30% -2.59%
Year 2 90% -10% 0.36% -0.36% 1.87% -1.87%
Year 3 110% 10% 0.42% 0.42% 1.00% 1.00%
Year 4 120% 20% 0.31% 0.62% 0.51% 1.02%
Year 5 110% 10% 0.27% 0.27% 0.35% 0.35%
Year 6 100% 0% 0.19% 0.00% 0.20% 0.00%
Year 7 90% -10% 0.16% -0.16% 0.14% -0.14%
Year 8 95% -5% 0.16% -0.08% 0.11% -0.06%
Year 9 100% 0% 0.15% 0.00% 0.09% 0.00%
Year 10 100% 0% 0.14% 0.00% 0.08% 0.00%
Year 11+ 105% 5% 0.82% 0.41% 0.30% 0.15%
Total 87% -13% 0.85% -2.15%
Entire Block Claims in Year 1
56
The Challenge of Interpreting ResultsTermination A to E Report
Impact on Reserve Level of 10% drop in Terminations
0.0%
0.2%
0.4%
0.6%
0.8%
1.0%
1.2%
1.4%
1.6%
1.8%
2.0%
Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr 11+
Entire Block
Claims in Year 1
Illustrative Purposes Only. Actual Impacts depend on
demographics of your block and the expected termination rates
SOA 2005 June Spring Meeting - 28PD, Long-Term Disability Experience Committee Update
-
8/14/2019 028 Combined New Hlth05
29/29
57
The Challenge of Interpreting ResultsTermination A to E Report
Total A to E does not always align with reserve adequacy
Other Issues:
Claims in termination report may not be consistent with
claims used in a run-out study
Future may not match the past
Changes in external factors
Changes in claim practice
Data quality is an important issue
Reserve adequacy depends on more than claim terminations
Run-out Tests are the Best Method to Ensure Reserve Adequacy
58
Long Term Disability Experience CommitteeUpdate
Questions ??